SC in Delhi Excise Case: ‘predicate offence’ necessary for PMLA violations
- October 18, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
SC in Delhi Excise Case: ‘predicate offence’ necessary for PMLA violations
Subject :Polity
Section: Legislation in news
In News: The Supreme Court has noted the necessity of a predicate offense of bribery against Manish Sisodia for PMLA charge of money laundering to stand.
Key Points:
- Enforcement Directorate (ED) is presently holding Manish Sisodia under arrest under money laundering charges. The Supreme Court (SC) was hearing two separate bail pleas by former Delhi Excise Minister and the Deputy CM Manish Sisodia in corruption and money laundering cases.
- The court noted that for the PMLA norm to be valid there has to be an alleged “predicate offence”.
What is a predicate offence?
- Predicate offenses in money laundering refers to a crime component of a larger crime. Predicate offences or underlying offences serve as the foundation for money laundering activities.
- In a financial context, the predicate offense would be any crime that generates monetary proceeds. These offences encompass a broad range of illegal activities that generate funds from unlawful sources.
- The larger crime would be money laundering or financing of terrorism. Money laundering serves as the mechanism through which the proceeds of predicate offences are concealed, transformed, and integrated into the legitimate financial system.
- A predicate offence is a crime that is a component of a more serious crime. For example, producing unlawful funds is the primary offence, and money laundering is the predicate offence.
What is the Delhi liquor excise case?
- Delhi government implemented the policy on November 17, 2021 but scrapped it at the end of September 2022 amid allegations of corruption.
- Under the new policy, according to the investigating agencies, the profit margin of wholesalers was increased from 5 per cent to 12 per cent for monetary considerations.
- The probe agencies have alleged that the new policy resulted in cartelisation and those ineligible for liquor licences were favoured for monetary benefits.
- However, the Delhi government and Sisodia have denied any wrongdoing and said the new policy would have led to an increase in the state’s excise revenue.
- The High court had declined him bail in the money laundering case linked to alleged irregularities in the city government’s excise policy, holding that the charges against him are “very serious in nature”.
Prevention of Money Laundering Act, 2002 (PMLA) Prevention of Money Laundering Act, 2002 (PMLA) was enacted to fight against the criminal offence of legalizing the income/profits from an illegal source. The Prevention of Money Laundering Act, 2002 enables the Government or the public authority to confiscate the property earned from the illegally gained proceeds. Imprisonment: The offender can face imprisonment for not less than three years, extending up to seven years. In some instances where the crime involves specified offenses, imprisonment can extend up to 10 years. Monetary Penalty: In addition to imprisonment, a penalty of Rs. 5 lakhs can be imposed on the offender. Enforcement Directorate (ED) The Directorate of Enforcement is a multi-disciplinary organization mandated with investigation of offence of money laundering and violations of foreign exchange laws. The statutory functions of the Directorate include enforcement of following Acts: 1. The Prevention of Money Laundering Act, 2002 (PMLA): It is a criminal law enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. 2. The Foreign Exchange Management Act, 1999 (FEMA): It is a civil law enacted to consolidate and amend the laws relating to facilitate external trade and payments and to promote the orderly development and maintenance of foreign exchange market in India. 3. The Fugitive Economic Offenders Act, 2018 (FEOA): This law was enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. ED has been given the responsibility to conduct investigation into suspected contraventions, enforce the provisions of the respective laws by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court. |